Ted Butler: Why the frantic movement of silver at the Comex?

Silver market analyst Ted Butler today marvels at the frantic movement of huge amounts of silver among the vaults of the New York Commodity Exchange, and wonders why it is happening and why it gets no notice from other market analysts.

Butler speculates that the cause is physical demand by JPMorganChase, which seems to have become the master of the silver and gold markets in the United States.

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Butler concludes: "This is just but another example of unanswered mysteries surrounding silver. Others include the fact that JPMorgan has never taken a loss when adding new Comex short positions in silver (or gold) over the past 10 years, only profits. And that JPMorgan has remained the largest paper Comex short while at the same time accumulating massive amounts of physical silver and gold.

"The real mystery, of course, is why the U.S. Commodity Futures Trading Commission or JPMorgan won't even address these concerns. One thing that's not a mystery is that JPMorgan is positioning itself for a monster move up in price and so should you."

Butler invites other explanations or elaborations, so here is some speculation:

1) Maybe the former head of JPMorganChase's commodity desk, Blythe Masters, was telling the truth to CNBC in April 2012 when she maintained that the bank had no position of its own in the monetary metals markets and traded them only for clients:

3) If JPMorganChase is trading the silver market for the U.S. government or for another government with the U.S. government's approval, that would explain the CFTC's indifference to market rigging conducted by the bank as the government's broker, since the Gold Reserve Act of 1934, as amended in the 1970s, establishing the Exchange Stabilization Fund in the U.S. Treasury Department, plainly authorizes the government to trade secretly in and manipulate any market in the world:

At a hearing in U.S. District Court in Boston in 2001 in GATA's market-manipulation lawsuit against the Bank for International Settlements, the U.S. Federal Reserve, the Treasury Department, JPMorganChase, and other investment banks, an assistant U.S. attorney stated that the U.S. government claimed the legal power to secretly rig the markets exactly as GATA was charging:

4) Signing the Coinage Act of 1965, which demonetized silver, President Lyndon B. Johnson proclaimed that the U.S. government would dishoard as much silver as necessary from its metal stockpile to prevent the metal's price from rising. Johnson said: "If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be and it will be used to keep the price of silver in line with its value":

That silver stockpile was exhausted years ago. So maybe, in its need to control monetary metals prices to protect the U.S. dollar and government bond prices and to control interest rates, the U.S. government has been using JPMorganChase as its broker in rebuilding a silver stockpile through manipulating the silver futures market and acquiring metal at a discount to fair-market value.

Months ago GATA formally asked JPMorganChase to elaborate on Blythe Masters' assertion that the bank trades the monetary metals only for clients. That is, GATA asked the question CNBC failed to ask: Do those clients include the U.S. government or other governments and central banks? Of course GATA got no response.

But if JPMorganChase is acting as the U.S. government's broker in the gold and silver futures markets, the bank may not be planning to run prices up but rather only to execute government trading orders, dishoarding and reacquiring metal as necessary to control the price.

In that case the gold and silver price suppression policy, longstanding as it has been, may still have a long way to go.